Correlation Between Weyco and SCHMID Group

Can any of the company-specific risk be diversified away by investing in both Weyco and SCHMID Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Weyco and SCHMID Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Weyco Group and SCHMID Group NV, you can compare the effects of market volatilities on Weyco and SCHMID Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Weyco with a short position of SCHMID Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and SCHMID Group.

Diversification Opportunities for Weyco and SCHMID Group

-0.72

Correlation Coefficient

Weyco  SCHMID Group

Pay attention - limited upside

The 3 months correlation between Weyco and SCHMID is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and SCHMID Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHMID Group NV and Weyco is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Weyco Group are associated (or correlated) with SCHMID Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHMID Group NV has no effect on the direction of Weyco i.e., Weyco and SCHMID Group go up and down completely randomly.

Pair Corralation between Weyco and SCHMID Group

Given the investment horizon of 90 days Weyco Group is expected to generate 0.6 times more return on investment than SCHMID Group. However, Weyco Group is 1.66 times less risky than SCHMID Group. It trades about 0.07 of its potential returns per unit of risk. SCHMID Group NV is currently generating about -0.12 per unit of risk. If you would invest  3,258  in Weyco Group on September 4, 2024 and sell it today you would earn a total of  341.00  from holding Weyco Group or generate 10.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Weyco Group  vs.  SCHMID Group NV

Weyco Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco unveiled solid returns over the last few months and may actually be approaching a breakup point.

SCHMID Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCHMID Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Weyco and SCHMID Group

The main advantage of trading using opposite Weyco and SCHMID Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, SCHMID Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SCHMID Group will offset losses from the drop in SCHMID Group's long position.

The idea behind Weyco Group and SCHMID Group NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.